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Rolls-Royce Rb211 (Boeing Aircraft Company)

Volume 890: debated on Monday 21 April 1975

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1.

asked the Secretary of State for Industry if he will issue a further invitation to Mr. Boullioun of Boeing Aircraft Company to meet him to discuss the prospects for fitting Rolls-Royce RB211 engines in the Boeing 747.

2.

asked the Secretary of State for Industry what action he has taken to facilitate the offer by Boeing of a version of the 747 aircraft powered by the Rolls-Royce RB211.

21.

asked the Secretary of State for Industry what discussions he has had with the management of Rolls-Royce Ltd. on its negotiations with Boeing.

My right hon. Friend has said that the Government will support the application of the RB211–524 engine to the Boeing 747 on similar terms to that for the Lockheed TriStar application as soon as a second major order is placed in addition to the requirements for British Airways. He has discussed the matter with Mr. Boullioun and Sir Kenneth Keith on several occasions and is well aware of their views. He has no plans for a further meeting with Mr. Boullioun at the moment.

Will the hon. Gentleman confirm that when Mr. Boullioun was invited here to meet the Secretary of State, the Secretary of State failed to meet him and left him, instead, to meet civil servants of the Department? Does the Secretary of State—indeed, does his junior Minister—think that that is the best way in which to conduct business on which the jobs of many men working at Rolls-Royce in Derby and other places now depend?

I much regret that the hon. Gentleman sees fit to raise this issue in that manner. My right hon. Friend the Secretary of State for Industry was engaged in other Cabinet business that he could not avoid. Mr. Boullioun was informed of the reason why he was invited, instead, to meet senior officials and he fully appreciated those reasons.

Have the Government not been told by the director of Rolls-Royce in Derby that the delays by the Government in making the grants available for the further work on the engine are already causing a serious risk that the project will not go ahead?

I fully understand the importance of the deadline which has to be met. At the same time, I hope that the hon. Gentleman will realise that we have to take account of the size of the extra investment, including that required for the growth in thrust, and to take account of it in relation to expected revenue from sales in terms of the appropriate test discount rate. That is why we have not so far been able to give a firm decision on this matter. I assure the hon. Gentleman that we are concerned about this issue and we are awaiting further proposals to be made by Rolls-Royce, if that company so sees fit.

Is the Minister aware that it is vital that the decision should be made fairly quickly? It is quite right that the engine division in Derby is concerned about the development of this uprated version of the RB211. I hope that the Government realise the urgency of getting the deal completed.

I assure my hon. Friend that we are very conscious of the urgency of this matter. Only today have we received the first part of further proposals from Rolls-Royce. I assure my hon. Friend that we shall be looking at these very carefully and urgently. It is obviously crucial that we take full account of any change in the economics of the project as regards the terms, the costs, and the profit returns. This we shall do.

Will the Minister bear in mind that Short Bros. and Harland of Belfast would be in a particularly advantageous position to tender for the podding of these engines in view of the success of its contract with Lockheed?

I am well aware of the importance of the position for the company that the hon. Gentleman has mentioned.

Is it not possible to press the Minister further on this missed meeting? Mr. Boullioun was invited by the Minister to come to the meeting. Was there no other Minister available? The hon. Gentleman must bear in mind that it is his Government which laid down the terms and conditions under which a second order has to be given before that engine will be funded by the Government. There is a grave discourtesy here to Boeing.

I assure the House that Mr. Boullioun, who is the person who matters here, certainly, fully understood the position and recognised that there was no discourtesy.